By Nicholas Larkin Nov. 17 (Bloomberg) -- Gold rose for a third trading session in London as demand for physical supplies strengthened and the dollar weakened against the euro, adding to the metal's appeal as an alternative investment. Japan entered its first recession since 2001 and the Group of 20 nations delayed agreeing on specific measures to combat the global crisis. Both increased demand for bullion as a haven. A weaker dollar makes gold more attractive for investors who use it to hedge against further declines in the U.S. currency. ``There's some physical related buying and as soon as the market comes off there seems to be bargain hunters lining up,'' Afshin Nabavi, a senior vice president at MKS Finance SA, one of Switzerland's four bullion refiners, said by phone from Geneva. Gold for immediate delivery rose $5.28, or 0.7 percent, to $747.38 an ounce by 9:15 a.m. in London. December futures gained $3.70 to $746.20 an ounce in electronic trading on the Comex division of the New York Mercantile Exchange. Bullion has declined 28 percent since reaching a record $1,032.70 an ounce in March, as investors liquidated their commodity holdings to raise cash. The dollar slipped 0.6 percent against the euro and 0.9 percent against the pound today, reversing earlier gains against both currencies. Eleven of 23 traders, investors and analysts surveyed from Mumbai to Chicago on Nov. 13 and 14 said gold may rise this week. Six advised selling the metal and six were neutral. Precious metals ``could outperform'' because of increased physical demand and the possibility that the dollar's strength is unsustainable in the long-term, UBS AG wrote in a note today. Gold vs. Silver Platinum is a compelling investment at current prices and silver's ``dramatic underperformance the past few months'' makes the metal attractive relative to gold. ``Long-term investors (including central banks) in gold should reduce holdings,'' the bank said. ``Disinflation and a stronger U.S. dollar will mean gold is unlikely to perform well over the next year or two.'' Among other metals for immediate delivery in London, silver added 1.7 percent to $9.69 an ounce. Platinum rose $8.50, or 1 percent, to $849, and palladium was $6, or 2.8 percent, higher at $223 an ounce. Macquarie Group Ltd. today cut its 2009 platinum forecast by 40 percent to $925 an ounce. The metal is used in autocatalysts. To contact the reporter on this story: Nicholas Larkin in London at nlarkin1@bloomberg.net

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